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“Scope Shift” in Game App Development Agreements

When a new client approached me with a problem that had emerged over a contract to develop a mobile game app, I was perplexed that after 20 minutes of explaining, the client had yet to refer to the contract itself. He described the central issue quite lucidly. Like so many cases involving copyright licenses, the issue was whether someone could license more rights than they owned or controlled. Put that way, the answer was simply, of course not. Yet, he was wrapped up in all the details; the who said, she said, he said, details.

It was heading down the road to be a case where it didn’t seem to matter what the contract said; it was all about what people thought the contract ought to say.

“Show me the contract,” I said. I knew where this thing was headed. “If those people who wanted a piece of you had a good case, they would have been quoting from it by now.” Sure enough, the contract had been bolted together in a seemingly tight fashion, but it had failed to anticipate scope shift.

The issue was the grant of rights. It seemed like nobody had bothered to read what the contract had to say about it. Worse yet, the lawyers who had written it, had failed to address a number of key issues. The representations and warranties were ill-fitting and inadequate, yet the lawyers had been careful to insert an entire-agreement clause that prohibited parol evidence about the meaning or intent of the words that now fit uncomfortably on the page like a shirt the wrong size. I felt good for the client. Intuitively he knew already that he was in the clear because if the parties on the other side had failed to appreciate how the app they were buying might need to become commercialized in the future, how could he do any better. No wonder it seemed more important for them to talk about how the contract came to be, rather than what it said.

There is an art to brevity. Many legal agreements tend to cover off so many potential issues that the essence of the deal is lost. Meanwhile fitting all that needs to be said into a small space is challenging. One of the few touchstones for success in preparing legal agreements is to understand the deal. There is no sense pounding a square peg into a round hole. Worse yet, is trying to lay blame on another party to a development contract for failing to anticipate a shift in scope that is directed at new distribution platforms or a new way of monetizing the app. After all, as we know, change is one of the few things that tends to stay the same.